INCOME
As a church cooperative bank, we are not a company that aims to maximise profits. However, it is essential that the bank generates reasonable profits to ensure it remains a sustainable going concern. In 2012, we once again succeeded in building upon the satisfactory income trend seen in previous years. Although net interest income – a key element of the bank's income – fell by approximately EUR 1.4 million to EUR 35.5 million – it still came in EUR 2.1 million higher than our cautious projected figure. By contrast, commission and other income rose by EUR 1.4 million, enabling us to match our 2011 operating result of EUR 41.7 million.
ADMINISTRATIVE EXPENDITURE AND RISK PROVISIONS
Administrative expenditure increased by EUR 1.8 million (10.0 per cent) to EUR 19.5 million due to non-recurring factors. This included personnel expenses of EUR 8.8 million, which were up EUR 370,000 (4.4 per cent) on the previous year due to hiring new staff, increases in standard salaries and higher pension provisions. At EUR 1.5 million, depreciation on tangible fixed assets was only slightly higher than in 2011. Other administrative expenses – which include donations and endowments by the bank – climbed by EUR 1.4 million to EUR 9.2 million. Risk provisions stood at EUR 2.2 million in the reporting year. This was EUR 3.5 million less than in the previous year. The figure included a transfer of EUR 1.1 million to reserves in line with 340f of the German Commercial Code (HGB).
NET PROFIT
At approximately EUR 20 million, the operating result before tax (EBT) was EUR 1.6 million up on the previous year (8.9 per cent). We paid just over EUR 6 million in tax – an increase of EUR 594,000 on 2011. Of the remaining profit after taxes (EUR 14 million), we transferred EUR 10.0 million to the fund for general banking risks as in the previous year. This left a net profit of EUR 3.9 million, some EUR 1 million (8.0 per cent) more than one year earlier.
As in previous years, we will propose paying a 5 per cent dividend on our members' participations at the bank's general meeting. The Supervisory Board endorses this move. The profit generated will also enable us to further strengthen our reserves – something that is necessary given the future capital adequacy requirements of Basel III for our lending business.
As a church cooperative bank, we are not a company that aims to maximise profits. However, it is essential that the bank generates reasonable profits to ensure it remains a sustainable going concern. In 2012, we once again succeeded in building upon the satisfactory income trend seen in previous years. Although net interest income – a key element of the bank's income – fell by approximately EUR 1.4 million to EUR 35.5 million – it still came in EUR 2.1 million higher than our cautious projected figure. By contrast, commission and other income rose by EUR 1.4 million, enabling us to match our 2011 operating result of EUR 41.7 million.
ADMINISTRATIVE EXPENDITURE AND RISK PROVISIONS
Administrative expenditure increased by EUR 1.8 million (10.0 per cent) to EUR 19.5 million due to non-recurring factors. This included personnel expenses of EUR 8.8 million, which were up EUR 370,000 (4.4 per cent) on the previous year due to hiring new staff, increases in standard salaries and higher pension provisions. At EUR 1.5 million, depreciation on tangible fixed assets was only slightly higher than in 2011. Other administrative expenses – which include donations and endowments by the bank – climbed by EUR 1.4 million to EUR 9.2 million. Risk provisions stood at EUR 2.2 million in the reporting year. This was EUR 3.5 million less than in the previous year. The figure included a transfer of EUR 1.1 million to reserves in line with 340f of the German Commercial Code (HGB).
NET PROFIT
At approximately EUR 20 million, the operating result before tax (EBT) was EUR 1.6 million up on the previous year (8.9 per cent). We paid just over EUR 6 million in tax – an increase of EUR 594,000 on 2011. Of the remaining profit after taxes (EUR 14 million), we transferred EUR 10.0 million to the fund for general banking risks as in the previous year. This left a net profit of EUR 3.9 million, some EUR 1 million (8.0 per cent) more than one year earlier.
As in previous years, we will propose paying a 5 per cent dividend on our members' participations at the bank's general meeting. The Supervisory Board endorses this move. The profit generated will also enable us to further strengthen our reserves – something that is necessary given the future capital adequacy requirements of Basel III for our lending business.